United States wholesale prices rise 0.2 percent in February

United States wholesale prices rise 0.2 percent in February

US consumer prices rose only marginally last month, possibly easing concerns that inflation might be accelerating after a surge in January.

In the 12 months through February, the CPI rose 2.2 percent, up from 2.1 percent in January.

It still is the best of times for the USA economy for in spite of President Donald Trump's micro-management the S&P 500 index remains 3.4% in the green so far this year and 10-year bond yields have fallen from the 2.94% high recorded in late February to 2.84% overnight. Prices for this measure of sales increased 0.4% in February from a month earlier.

The Federal Reserve tracks a different index, the personal consumption expenditures price index excluding food and energy, which has consistently undershot the central bank´s 2 percent target since mid-2012.

Inflation in India slowed for a second straight month, giving the central bank room to keep interest rates on hold for longer while providing relief to battered bond investors.

Auto prices restrained inflation, as the cost of new vehicles fell 0.5% in February, the most since 2009, while used cars and trucks were down 0.3%, breaking a four-month streak of gains.

"Inflation is beginning to creep higher, led by services, exactly what you might expect in an economy characterized by a drum-tight labor market", Stephen Stanley, chief economist at Amherst Pierpont Securities, wrote in a research note.

Including energy and food prices, the annual inflation reached 2.2% against 2.1% in January.




The Commerce Department reported Wednesday that retail sales slipped 0.1% last month, while January's performance was revised upward to a 0.1% drop from a 0.3% decline.

The unemployment rate held steady at a 17-year low of 4.1% in February as the labour force participation rate jumped to 63.0% from 62.7% in January, reflecting increased confidence among jobseekers of finding employment.

Central bankers were baffled for much of previous year by the weakness of price pressures in the face of the continuing recovery.

In the wake of the Great Recession, 2 percent has been the Fed's target for core inflation.

"Solid domestic economic momentum and the impulse from oncoming fiscal stimulus will underpin a gradual build in inflation toward the Fed's 2 percent target", said Gregory Daco, chief economist at Oxford Economics in NY.

At a seasonally adjusted annual rate, the price index has gained 4.2 per cent so far this year, compared to a gain of only 3.3 per cent at the same point last year. The Federal Reserve's most recent beige book said prices increased across the U.S.at a "moderate pace", after months of some districts reporting less robust "modest" price growth. The airline ticket prices rose by 0.6%, while medical services shrank by 0.1%. Owners' equivalent rent of primary residence, which is what a homeowner would pay to rent or receive from renting a home, rose 0.2 percent last month after advancing 0.3 percent in January. Apparel prices rose 1.5% on the month and transportation services increased 1%.

Apparel prices continued to march higher, rising 1.5 percent in February after surging 1.7 percent in January.

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